SECOND QUARTER. Second Quarter of Fiscal 2018 vs. Second Quarter of Fiscal Second Quarter of Fiscal 2018 vs. First Quarter of Fiscal 2018

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1 SECOND QUARTER Fiscal 2018 Report to Shareholders Canaccord Genuity Group Inc. Reports Second Quarter Fiscal 2018 Results Excluding significant items, second quarter earnings per common share of $0.01 (1) Significantly increased scale of global wealth management business; assets under administration and management increase to $54.5 billion (All dollar amounts are stated in Canadian dollars unless otherwise indicated) TORONTO, November 7, During the second quarter of fiscal 2018, the quarter ended, Canaccord Genuity Group Inc. (Canaccord Genuity, the Company, TSX: CF) generated $191.5 million in revenue. Excluding significant items (1), the Company recorded net income (3) of $3.5 million or net income of $1.0 million attributable to common shareholders (2) (earnings per common share of $0.01). In September, the Company completed the acquisition of Hargreave Hale Limited and recorded as significant items acquisition-related costs and certain restructuring expenses in connection with the transaction. Including all significant items, on an IFRS basis, the Company recorded a net loss (3) of $7.3 million or a net loss attributable to common shareholders (2) of $9.8 million (a loss per common share of $0.11). Our fiscal second quarter results reflect the increasing stability that our global wealth management operations are capable of delivering against a challenging backdrop for mid-market investment banking and advisory activity, said Dan Daviau, President & CEO of Canaccord Genuity Group Inc. We are encouraged by improving activity levels heading into the second half of our fiscal year and we look forward to delivering improving returns and stronger long-term stability for our shareholders. Second Quarter of Fiscal 2018 vs. Second Quarter of Fiscal Revenue of $191.5 million, a decrease of 1.1% or $2.1 million from $193.6 million Excluding significant items, expenses of $186.2 million, a decrease of 2.4% or $4.5 million from $190.7 million (1) Expenses of $198.6 million, an increase of 3.0% or $5.8 million from $192.8 million Excluding significant items, earnings per common share of $0.01 compared to a loss per common share of $0.03 (1) Excluding significant items, net income (3) of $3.5 million compared to net income (3) of $2.0 million (1) Net loss (3) of $7.3 million compared to net income (3) of $0.2 million Loss per common share of $0.11 compared to a loss per common share of $0.05 Second Quarter of Fiscal 2018 vs. First Quarter of Fiscal 2018 Revenue of $191.5 million, a decrease of 4.1% or $8.3 million from $199.8 million Excluding significant items, expenses of $186.2 million, a decrease of 5.5% or $10.8 million from $197.0 million (1) Expenses of $198.6 million, a decrease of 1.5% or $3.0 million from $201.6 million Excluding significant items, earnings per common share of $0.01 compared to a loss per common share of $0.01 (1) Excluding significant items, net income (3) of $3.5 million compared to net income (3) of $1.6 million (1) Net loss (3) of $7.3 million compared to a net loss (3) of $2.6 million Loss per common share of $0.11 compared to a loss per common share of $0.05 Contents Canaccord Reports Second Quarter Results 1 Letter to Shareholders 5 Management s Discussion 7 and Analysis Unaudited Interim Condensed Consolidated Statements of Financial Position Unaudited Interim Condensed Consolidated Statements of Operations Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss Unaudited Interim Condensed Consolidated Statements of Changes in Equity Unaudited Interim Condensed Consolidated Statements of Cash Flows Notes to Unaudited Interim Condensed Consolidated Financial Statements CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL

2 Year-to-Date Fiscal 2018 vs. Year-to-Date Fiscal (Six months Ended vs. Six Months Ended 2016) Revenue of $391.4 million, a decrease of 2.1% or $8.4 million from $399.8 million Excluding significant items, expenses of $383.2 million, a decrease of 0.4% or $1.4 million from $384.6 million (1) Expenses of $400.2 million, an increase of 2.9% or $11.2 million from $389.0 million Excluding significant items, diluted EPS of $0.00 compared to diluted EPS of $0.02 (1) Excluding significant items, net income (3) of $5.2 million compared to net income of $10.1 million (1) Net loss (3) of $9.8 million compared to net income (3) of $7.7 million Loss per common share of $0.16 compared to a loss per common share $0.01 Financial Condition at end of Second Quarter Fiscal 2018 vs. Fourth Quarter Fiscal Cash and cash equivalents balance of $543.1 million, a decrease of $134.7 million from $677.8 million Working capital of $464.7 million, a decrease of $23.8 million from $488.5 million Total shareholders equity of $720.4 million, a decrease of $44.4 million from $764.8 million Book value per diluted common share of $4.74, a decrease of $0.34 from $5.08 (4) On November 7,, the Board of Directors approved a dividend of $0.01 per common share, payable on December 15,, with a record date of December 1,. On November 7,, the Board of Directors approved the following cash dividends: $ per Series A Preferred Share payable on January 2, 2018 with a record date of December 22, ; and $ per Series C Preferred Share payable on January 2, 2018 with a record date of December 22,. Summary of Operations CORPORATE On August 11,, the Company announced the filing of a normal course issuer bid (NCIB) to purchase common shares of the Company through the facilities of the TSX and on alternative trading systems during the period from August 15, to August 14, The purpose of any purchase under this program is to enable the Company to acquire shares for cancellation. The maximum number of shares that may be repurchased represented 5.0% of the Company s outstanding common shares at the time of filing the NCIB. There have been no shares purchased under this and the previous NCIB during the six months ended. On September 18,, the Company, through its UK & Europe based wealth management business, Canaccord Genuity Wealth Management ( CGWM (UK) ), completed its previously announced acquisition of Hargreave Hale Limited ( Hargreave Hale ). The Company acquired 100% of Hargreave Hale for cash and deferred consideration of 52.4 million (C$86.4 million) and additional contingent consideration of up to 27.5 million (C$45.4 million). The contingent consideration is structured to be payable over a period of up to three years, subject to the achievement of certain performance targets related to the retention and growth of client assets and revenues and an amount determined with reference to the fund management business. The cash consideration was funded in part from a credit facility provided to CGWM (UK) by National Westminster Bank plc and HSBC Bank plc in the amount of 40.0 million (C$66.9 million). Additional contingent consideration, if paid, will be funded from the ongoing cash flow of the business. The Company expensed $4.4 million of acquisition related costs and $2.0 million of restructuring expenses for Q2/18 and $6.5 million of acquisition-related costs for the six months ended. In connection with the acquisition, an additional expense of 14.0 million (C$23.4 million) is expected to be recorded as a significant item over a four-year measurement period. This amount includes certain incentive-based payments determined with reference to financial targets and other performance criteria. CAPITAL MARKETS Canaccord Genuity participated in 66 investment banking transactions globally, raising total proceeds of C$6.3 billion (5) during fiscal Q2/18 Canaccord Genuity led or co-led 23 transactions globally, raising total proceeds of C$541.6 million (5) during fiscal Q2/18 Significant investment banking transactions for Canaccord Genuity during fiscal Q2/18 include: million initial public offering of Triple Point Social Housing REIT plc on LSE 58.8 million for accesso Technology Group plc on AIM 53.0 million for Pacific Industrial and Logistics REIT plc on AIM AUD$134.6 million for Cooper Energy Limited on ASX C$35.0 million for Barkerville Gold Mines on TSXV AUD$32.5 million for Osprey Medical, Inc. on ASX C$30.0 million for Canaccord Genuity Acquisition Corp. on TSX C$25.1 million for The Hydropothecary Corporation on TSXV US$20.1 million for Summit Therapeutics on Nasdaq US$20.1 million for T2 Biosystems Inc. on Nasdaq C$24.1 million for Bowmore Exploration Ltd. (Osisko Metals) on TSX 2 CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL 2018

3 In Canada, Canaccord Genuity participated in raising $225.0 million for government and corporate bond issuances during fiscal Q2/18 Canaccord Genuity generated advisory revenues of $30.4 million during fiscal Q2/18, an increase of $9.1 million or 42.8% compared to the same quarter last year During fiscal Q2/18, significant M&A and advisory transactions included: Cape plc on its 575 million sale to Altrad Investment Authority SAS Sandvine Corporation on its C$562 million sale to Francisco Partners and Procera Networks Monitise plc on its 75 million sale to Fiserv, Inc. OSRAM Licht AG on its acquisition of Digital Lumens Sientra Inc. on its acquisition of Miramar Labs Shore Gold Inc. on the consolidation of the Star-Orion South Diamond Project and earn-in option agreement with Rio Tinto Pollard Banknote on its C$51 million acquisition of Innova ICG on its investment in Blackrock Expert Services Carmanah Technologies on the US$19.5 million sale of its Go Power! Business to Valterra Products Goals Soccer Centres Plc on the formation of its joint venture with City Football Group Atlas for Men on the refinancing and dividend recapitalization of its existing LBO NCE Computer Group on its sale to Park Place Technologies CORWIL Technology on its sale to Integra Technologies Stirling Square on its investment in Isoclima Group as part of a management buyout Dalradian Resources on its C$20 million purchase of the 2% net smelter return royalty on its Curraghinalt gold deposit from Minco plc RG group on its 145 million sale to LBO France from Abénex Capital Tiama on its 150 million sale to Caravelle private equity fund CANACCORD GENUITY WEALTH MANAGEMENT (GLOBAL) Contributions from Hargreave Hale from September 18, are included in the operating figures under Canaccord Genuity Wealth Management (UK & Europe) below. Globally, Canaccord Genuity Wealth Management generated $70.6 million in revenue in Q2/18 Assets under administration in Canada and assets under management in the UK & Europe and Australia were $54.5 billion at the end of Q2/18 (4) CANACCORD GENUITY WEALTH MANAGEMENT (NORTH AMERICA) Canaccord Genuity Wealth Management (North America) generated $32.1 million in revenue and, after intersegment allocations and before taxes, recorded net income of $1.1 million in Q2/18 Assets under administration in Canada were $12.8 billion as at, an increase of 1.0% from $12.7 billion at the end of the previous quarter and an increase of 23.9% from $10.3 billion at the end of fiscal Q2/17 (4) Assets under management in Canada (discretionary) were $2.7 billion as at, an increase of 1.5% from Q1/18 and an increase of 120.5% from $1.2 billion at the end of fiscal Q2/17 (4) Canaccord Genuity Wealth Management had 134 Advisory Teams (6) at the end of fiscal Q2/18, a decrease of one Advisory Team from June 30, and a decrease of five from 2016 CANACCORD GENUITY WEALTH MANAGEMENT (UK & EUROPE) Wealth management operations in the UK & Europe generated $37.5 million in revenue and, after intersegment allocations, and excluding significant items, recorded net income of $7.5 million before taxes in Q2/18 (1) Assets under management (discretionary and non-discretionary) were $40.8 billion ( 24.4 billion) as at, an increase of 58.4% from $25.8 billion ( 15.3 billion) at the end of the previous quarter and an increase of 75.8% from $23.2 billion ( 13.6 billion) at 2016 (4). In local currency (GBP), assets under management at increased by 59.8% compared to Q1/18 and 78.8% compared to The increase in AUM in Q2/18 was largely due to the acquisition of Hargreave Hale. (1) Figures excluding significant items are non-ifrs measures. See Non-IFRS measures on pages 4. (2) Net (loss) income attributable to common shareholders is calculated as the net (loss) income adjusted for non-controlling interests and preferred share dividends. (3) Before non-controlling interests and preferred share dividends. (4) See Non-IFRS Measures on pages 4 and 8 (5) Transactions over $1.5 million. Internally sourced information. (6) Advisory Teams are normally comprised of one or more Investment Advisors (IAs) and their assistants and associates, who together manage a shared set of client accounts. Advisory Teams that are led by, or only include, an IA who has been licensed for less than three years are not included in our Advisory Team count, as it typically takes a new IA approximately three years to build an average-sized book of business. CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL

4 NON-IFRS MEASURES The non-international Financial Reporting Standards (IFRS) measures presented include assets under administration, assets under management, book value per diluted common share and figures that exclude significant items. Significant items include restructuring costs, amortization of intangible assets acquired in connection with a business combination, impairment of goodwill and other assets, acquisition-related expense items, which include costs recognized in relation to both prospective and completed acquisitions, gains or losses related to business disposals including recognition of realized translation gains on the disposal of foreign operations, as well as certain expense items, typically included in development costs, which are considered by management to reflect a singular charge of a non-operating nature. Book value per diluted common share is calculated as total common shareholders equity adjusted for assumed proceeds from the exercise of options and warrants and conversion of convertible debentures divided by the number of diluted common shares outstanding including estimated amounts in respect of share issuance commitments including options, warrants, and convertible debentures, as applicable, and adjusted for shares purchased under the NCIB and not yet cancelled and estimated forfeitures in respect of unvested share awards under share-based payment plans. Management believes that these non-ifrs measures will allow for a better evaluation of the operating performance of the Company s business and facilitate meaningful comparison of results in the current period to those in prior periods and future periods. Figures that exclude significant items provide useful information by excluding certain items that may not be indicative of the Company s core operating results. A limitation of utilizing these figures that exclude significant items is that the IFRS accounting effects of these items do in fact reflect the underlying financial results of the Company s business; thus, these effects should not be ignored in evaluating and analyzing the Company s financial results. Therefore, management believes that the Company s IFRS measures of financial performance and the respective non-ifrs measures should be considered together. SELECTED FINANCIAL INFORMATION EXCLUDING SIGNIFICANT ITEMS (1) (C$ thousands, except per share and % amounts) Three months ended September 30 Six months ended September Quarteroverquarter change YTD-over- YTD change Total revenue per IFRS $ 191,547 $ 193,602 (1.1)% $ 391,355 $ 399,782 (2.1)% Total expenses per IFRS $ 198,613 $ 192, % $ 400,193 $ 389, % Revenue Significant items recorded in Canaccord Genuity Realized translation gains on disposal of Singapore 1,193 (100.0)% Total revenue excluding significant items 191, ,602 (1.1)% 391, ,589 (1.8)% Expenses Significant items recorded in Canaccord Genuity Amortization of intangible assets (29.9)% 1,159 1,646 (29.6)% Restructuring costs (2) 4,256 n.m. 4,704 n.m. Significant items recorded in Canaccord Genuity Wealth Management Amortization of intangible assets 1,262 1,323 (4.6)% 2,586 2,727 (5.2)% Restructuring costs (2) 2,000 n.m. 2,000 n.m. Acquisition-related costs 4,364 n.m. 6,548 n.m. Total significant items 12,461 2,150 n.m. 16,997 4, % Total expenses excluding significant items 186, ,695 (2.4)% 383, ,641 (0.4)% Net income before taxes adjusted $ 5,395 $ 2, % $ 8,159 $ 13,948 (41.5)% Income taxes adjusted 1, % 2,996 3,801 (21.2)% Net income adjusted $ 3,548 $ 2, % $ 5,163 $ 10,147 (49.1)% Net income (loss) attributable to common shareholders, adjusted 970 (2,481) 139.1% 343 1,819 (81.1)% Earnings (loss) per common share basic, adjusted $ 0.01 $ (0.03) 133.3% $ 0.00 $ 0.02 (100.0)% Earnings (loss) per common share diluted, adjusted $ 0.01 $ (0.03) 133.3% $ 0.00 $ 0.02 (100.0)% (1) Figures excluding significant items are non-ifrs measures. See Non-IFRS Measures on page 8. (2) Restructuring costs for the six months ended related to termination benefits incurred as a result of the closing of certain trading operations in our UK & Europe capital markets operations, staff reductions in our Canadian and US capital markets operations, as well as real estate and other integration costs related to the acquisition of Hargreave Hale. n.m.: not meaningful 4 CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL 2018

5 Fellow Shareholders: Canaccord Genuity Group earned revenue of $192 million for our second quarter of fiscal While we are encouraged by the improving momentum for small- and mid-cap global growth equities that began in late September, the operating environment we witnessed for most of the three-month period was in many respects a continuance of the conditions we experienced in our first fiscal quarter, with the added impact of the typical summer slowdown in North American markets. Despite this being a challenging period for capital markets activities in most of our regions, I would like to highlight the positive impact that our strategic shift to strengthening contributions from our global wealth management operations has contributed to our overall results. Excluding significant items (1), net income for the three-month period was $3.5 million and diluted earnings per share was $0.01, improvements of 77% and 133% respectively when compared to the similar revenue environment that we experienced in the same period last year. Driving long-term stability for our shareholders requires a disciplined focus on achieving a balance that will also allow us to deliver more consistent results from our global capital markets operations. During the quarter, we incurred restructuring costs of $6.3 million, of which $4.3 million was attributable to our realignment efforts in our US and Canadian capital markets businesses, with the balance related to our acquisition of Hargreave Hale. Additionally, cost containment continues to be an important priority across our operations. Excluding significant items (1), expenses as a percentage of revenue decreased by 1.3 percentage points year-over-year. Non-compensation related operating expenses decreased a further 4% and our firm wide general & administrative expenses declined by 7%, when compared to the same period last year. Wealth Management: Added scale marks an important point in our journey to long-term stability Our global wealth management operations earned combined revenue of $70 million in the second quarter, a year-over-year improvement of 9%. At the end of the three-month period, total assets under management and administration for Canaccord Genuity Wealth Management grew to $55 billion. Following the closing of our acquisition of Hargreave Hale on September 18, our wealth management business in the UK & Europe ended the quarter with a significant increase in assets under management to $41 billion, cementing its position as a top 10 wealth manager by assets in the region. Fee-related revenue in this business increased to 73%, from 71% a year ago. While the revenue and profitability associated with the increase in client assets from the Hargreave Hale acquisition will be more wholly reflected in our next fiscal quarter, the business has continued to post impressive asset growth and fund sales as we progress with our integration efforts. This acquisition closed on September 18 and has contributed roughly 2 million in second quarter revenue for our wealth management business in the UK & Europe. Our Canadian wealth management business earned revenue of $32 million for the second quarter, an improvement of 8% compared to the same period last year. Assets under management and administration in this business reached $12.8 billion, a year-over-year improvement of 24%. With an added benefit from strengthening market valuations, results in this business were driven by steady execution of our strategy of investing in and developing our talent pool to facilitate the delivery of a differentiated service model. At the end of our second fiscal quarter, average book size per advisory team improved by 21% compared to a year ago. Discretionary assets in this business increased by 121% year-over-year, which helped lift the percentage of fee-related revenue in this business to 42% for our second fiscal quarter. Our recent achievements have led to an increased pipeline of recruiting activity in our Canadian wealth management business and we are attracting growing interest from advisory teams in all regions across Canada. We are also continuing to explore opportunities to grow our Australian wealth management operations. Global Capital Markets: Positioned for stronger performance as the mid-market environment improves In late September, relative performance of the S&P Global Small Cap index began to show a positive upturn, having lagged the Global Large Cap index for most of the calendar year. We see this as an encouraging indication that the environment for growth stocks is improving. For most of the three-month period, global new issue activity for small and mid-cap equities posted further declines from the previous quarter and the impact of this was most notable in our Canadian and US capital markets businesses. Headwinds from low volatility, low rates and a flat yield curve also impacted trading volumes across our operations. For our second fiscal quarter, revenue for our global capital markets division was $119 million. Our UK & Europe capital markets business delivered a profitable quarterly result on improved investment banking and advisory activity. On a year-over-year basis, second quarter revenue in this operation improved by 24%. As the realities of Brexit draw near, our teams in the region have been productive in several transactions that leverage our unique cross-border capabilities and relationships to help companies in the UK secure investment and partnerships from across Europe. In Australia, activity levels have begun to regain momentum following a period of subdued activity in the previous quarter, a result of a significant rotation out of small cap equites. Second quarter investment banking activity in this region was broadly in-line with historical levels and revenue for the second quarter improved by 210% sequentially, which helped this this business deliver a pre-tax profit margin of 11%. Second quarter performance from our Canadian and US operations was weaker in part due to the typical summer slowdown, and also a result of the lower levels of mid-market equity issuance that took place across our industry in both regions. During the quarter, we made some staffing (1) Figures excluding significant items are non-ifrs measures. See Non-IFRMS Measures on page 8. CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL

6 reductions in both businesses in the interest of fostering a more intensive focus on driving profitability in core focus areas, while paring back on strategies that have been difficult to scale in the current market environment. On a positive note, advisory revenues earned by our US business for the first half of fiscal 2018 were 7% higher than the same period last year. This team has leveraged our strengths in the healthcare and technology sectors to build a solid pipeline of advisory work, which is a strong complement to our equity capital markets activities in the region. Our US equities business has also continued to gain market share in the region, despite the softer trading environment. In Canada, our origination teams have been actively leveraging our strengths as the leading independent mid-market investment bank to help entrepreneurs access growth capital in emerging high-growth sectors with notable activity in the cannabis and fintech segments. Our recent establishment of Canaccord Genuity Acquisition Corp. as an alternate vehicle to access public markets has also attracted interest from numerous entrepreneurs with established businesses and strong growth potential. Each of our operations in Canada, US, Australia, UK, Europe & Dubai has its own distinct regional advantages, but our global capabilities are an extraordinary differentiator and an important competitive advantage for our business. Across our global capital markets operations, activity levels heading into our third fiscal quarter are markedly stronger than in the first half of the year. Strengthening commodity prices helped to lift the TSX to near-record levels in October, which bodes well for activities in our Canadian and Australian capital markets businesses. We are also progressing with the establishment of ancillary businesses within our capital markets operations which will allow us to capture greater efficiencies from our existing infrastructure, while offering a broader suite of products and services to our existing client base. And finally, I d like to provide an update on our expectations for the upcoming implementation of MiFID II. First and foremost, we have developed a strategy to capitalize on our commitment to producing the highly focused research and strong trade execution that adds the greatest value for our buy side clients and gives us confidence in our ability to continue to attract commissions. Given our material UK presence, we have been preparing for this development for some time and we have been having an active dialogue with our clients around pricing and their approach to MiFID II payment mechanisms. We expect limited impact to our capital markets business once this change is implemented. With the added benefit of our proprietary stock screening and idea generation tool, Quest, we also see opportunities to provide enhanced offerings for existing and new clients. A balanced business model puts us on track for greater earnings stability through the cycle This was a pivotal quarter for our organization, as we added meaningful scale in our global wealth management operations, a strategy we will continue to build upon and one which will deliver improved long-term stability for our shareholders. Looking ahead, we maintain a constructive outlook for investment banking and advisory activity. Our unique global mid-market capabilities strengthen our competitive position in all our regions and the backdrop for our core focus sectors is healthy. With our efforts to better focus and align our operations, and the new and improving contributions from our wealth management businesses, I am confident that market-driven challenges are more navigable for our business than ever before. DAN DAVIAU President & CEO Canaccord Genuity Group Inc. 6 CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL 2018

7 Management s Discussion and Analysis Second quarter fiscal 2018 for the three months and six months ended this document is dated November 7, The following discussion of the financial condition and results of operations for Canaccord Genuity Group Inc. is provided to enable the reader to assess material changes in our financial condition and to assess results for the three- and six-month periods ended compared to the corresponding period in the preceding fiscal year. The three-month period ended is also referred to as second quarter 2018 and Q2/18. Unless otherwise indicated or the context otherwise requires, the Company refers to Canaccord Genuity Group Inc. and Canaccord Genuity Group refers to the Company and its direct and indirect subsidiaries. Canaccord Genuity refers to the investment banking and capital markets segment of the Company. This discussion should be read in conjunction with: the unaudited interim condensed consolidated financial statements for the three- and six-month periods ended, beginning on page 32 of this report; our Annual Information Form (AIF) dated June 23, ; and the annual Management s Discussion and Analysis (MD&A) including the audited consolidated financial statements for the fiscal year ended March 31, (Audited Annual Consolidated Financial Statements) in the Company s annual report dated June 1, (the Annual Report). There has been no material change to the information contained in the annual MD&A for fiscal except as disclosed in this MD&A. The Company s financial information is expressed in Canadian dollars unless otherwise specified. Cautionary Statement Regarding Forward-Looking Information This document may contain forward-looking statements (as defined under applicable securities laws). These statements relate to future events or future performance and reflect management s expectations, beliefs, plans, estimates, intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, including business and economic conditions and the Company s growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management s current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as may, will, should, expect, plan, anticipate, believe, estimate, predict, potential, continue, target, intend, could or the negative of these terms or other comparable terminology. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement. These factors include, but are not limited to, market and general economic conditions, the nature of the financial services industry and the risks and uncertainties discussed from time to time in the Company s interim condensed and annual consolidated financial statements and in its Annual Report and AIF filed on as well as the factors discussed in the section entitled Risks in this MD&A, which include market, liquidity, credit, operational, legal and regulatory risks. Material factors or assumptions that were used by the Company to develop the forward-looking information contained in this document include, but are not limited to, those set out in the Fiscal 2018 Outlook section in the annual MD&A and those discussed from time to time in the Company s interim condensed and annual consolidated financial statements and in its Annual Report and AIF filed on The preceding list is not exhaustive of all possible risk factors that may influence actual results. Readers are cautioned that the preceding list of material factors or assumptions is also not exhaustive. Although the forward-looking information contained in this document is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements contained in this document are made as of the date of this document and should not be relied upon as representing the Company s views as of any date subsequent to the date of this document. Certain statements included in this document may be considered financial outlook for purposes of applicable Canadian securities laws, and such financial outlook may not be appropriate for purposes other than this document. Except as may be required by applicable law, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking information, whether as a result of new information, further developments or otherwise. Presentation of Financial Information and Non-IFRS Measures This MD&A is based on the unaudited interim condensed consolidated financial statements for the three- and six-month periods ended (Second Quarter 2018 Financial Statements) prepared in accordance with International Financial Reporting Standards (IFRS). The Second Quarter 2018 Financial Statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34), and using accounting policies consistent with those applied in preparing the Company s Audited Annual Consolidated Financial Statements for the year ended March 31,. CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL

8 MANAGEMENT S DISCUSSION AND ANALYSIS NON-IFRS MEASURES Certain non-ifrs measures are utilized by the Company as measures of financial performance. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Non-IFRS measures presented include assets under administration, assets under management, book value per diluted common share, return on common equity and figures that exclude significant items. The Company s capital is represented by common and preferred shareholders equity and, therefore, management uses return on common equity (ROE) as a performance measure. Also used by the Company as a performance measure is book value per diluted common share, which is calculated as total common shareholders equity adjusted for assumed proceeds from exercise of options and warrants divided by the number of diluted common shares outstanding including estimated amounts in respect of share issuance commitments including options and warrants, as applicable, and adjusted for shares purchased under the normal course issuer bid and not yet cancelled, and estimated forfeitures in respect of unvested share awards under share-based payment plans. Assets under administration (AUA) and assets under management (AUM) are non-ifrs measures of client assets that are common to the wealth management business. AUA Canada, AUM Australia and AUM UK & Europe are the market value of client assets managed and administered by the Company from which the Company earns commissions and fees. This measure includes funds held in client accounts as well as the aggregate market value of long and short security positions. AUM Canada includes all assets managed on a discretionary basis under programs that are generally described as or known as the Complete Canaccord Investment Counselling Program and the Complete Canaccord Private Investment Management Program. Services provided include the selection of investments and the provision of investment advice. The Company s method of calculating AUA Canada, AUM Canada, AUM Australia and AUM UK & Europe may differ from the methods used by other companies and therefore may not be comparable to other companies. Management uses these measures to assess operational performance of the Canaccord Genuity Wealth Management business segment. AUM Canada is also administered by the Company and is included in AUA Canada. Financial statement items that exclude significant items are non-ifrs measures. Significant items for these purposes include restructuring costs, amortization of intangible assets acquired in connection with a business combination, impairment of goodwill and other assets, acquisition-related expense items, which include costs recognized in relation to both prospective and completed acquisitions, gains or losses related to business disposals including recognition of realized translation gains on the disposal of foreign operations, as well as certain expense items, typically included in development costs, which are considered by management to reflect a singular charge of a non-operating nature. See the Selected Financial Information Excluding Significant Items table on page 13. Management believes that these non-ifrs measures allow for a better evaluation of the operating performance of the Company s business and facilitate meaningful comparison of results in the current period to those in prior periods and future periods. Figures that exclude significant items provide useful information by excluding certain items that may not be indicative of the Company s core operating results. A limitation of utilizing these figures that exclude significant items is that the IFRS accounting effects of these items do in fact reflect the underlying financial results of the Company s business; thus, these effects should not be ignored in evaluating and analyzing the Company s financial results. Therefore, management believes that the Company s IFRS measures of financial performance and the respective non-ifrs measures should be considered together. Business Overview Through its principal subsidiaries, Canaccord Genuity Group Inc. is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. Canaccord Genuity Group has offices in 10 countries worldwide, including wealth management offices located in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. Canaccord Genuity, the Company s international capital markets division, has operations in Canada, the US, the UK, France, Ireland, Hong Kong, China, Australia and Dubai. Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX. Canaccord Genuity Series A Preferred Shares are listed on the TSX under the symbol CF.PR.A. Canaccord Genuity Series C Preferred Shares are listed on the TSX under the symbol CF.PR.C. Our business is affected by the overall condition of the worldwide equity and debt markets. 8 CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL 2018

9 MANAGEMENT S DISCUSSION AND ANALYSIS Market Environment during Q2 fiscal 2018 Economic backdrop: During the second quarter of fiscal 2018, the S&P 500 (+4.5%), European equities (+5.5%) and emerging market (EM) equities (+7.7%) all posted positive returns. In Canada, stronger commodity prices (+7.2%) supported the S&P/TSX (+3.7%) and the Canadian dollar (+4.0%) over the three-month period. While it is difficult determine the extent that US economic data were impacted by hurricanes Harvey and Irma during the second quarter of fiscal 2018, we note that inflation remains benign at a time when global economic growth is accelerating. Importantly, the appreciation in Emerging Markets (EM) currencies in combination with strengthening but still depressed oil prices has sent EM inflation near 2009 lows. As a result, EM central banks have been able to cut policy rates and reflate economies. With this wide gap between EM interest rates and inflation, we can expect further monetary accommodation from EM central banks. Given that emerging market economies contribute to roughly 75% of global GDP growth, we are optimistic that solid global growth and synchronization could be around for several more quarters. Investment banking and advisory Capital raising and advisory activity on our core focus areas remained subdued for most of the fiscal second quarter. As indicated in the table below, the performance of global small cap equities has lagged that of global large cap equities for over a year. Only in September did we see a positive relative performance upturn in small cap equities, an encouraging sign for capital raising and advisory activities in our business. Index Value at End of Fiscal Quarter Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 30-Sep-16 (Y/Y) 30-Dec-16 (Y/Y) 31-Mar-17 (Y/Y) 30-Jun-17 (Y/Y) 29-Sep-17 (Y/Y) (Q/Q) S&P IFCI Global Small Cap % % % % % 8.6% S&P IFCI Global Large Cap % % % % % 6.7% Source: Thomson Reuters Datastream, Canaccord Genuity estimates Our capital raising and advisory activities are primarily focused on small and mid-capitalization companies in specific growth sectors of the global economy, as outlined on page 2. These sectors may experience growth or downturns independent of broader economic and market conditions, and government regulation can also have a more profound impact on capital formation for smaller companies. Volatility in the business environment for these industries or in the market for securities of companies within these industries in the regions where we operate could adversely affect our financial results and ultimately, the market value of our shares. Advisory revenues are primarily dependent on the successful completion of merger, acquisition or restructuring mandates. Weak economic and global financial market conditions can result in a challenging business environment for small and mid-market M&A activity, but may provide opportunities for our restructuring business. Trading Trading volumes for small- and mid-cap equities in many of the markets where we operate were lower compared to the previous fiscal quarter, and lack of new issue activity in small- and mid-cap equities continued to put pressure on trading activity. Average Value During Fiscal Quarter Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 30-Sep-16 (Y/Y) 30-Dec-16 (Y/Y) 31-Mar-17 (Y/Y) 30-Jun-17 (Y/Y) 29-Sep-17 (Y/Y) (Q/Q) Russell % % % % % 1.8% S&P 400 Mid Cap % % % % % 0.9% FTSE % % % % % -0.1% MSCI EU Mid Cap % % % % % 0.4% S&P/TSX % % % % % -1.9% Source: Thomson Reuters Datastream, Canaccord Genuity estimates CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL

10 MANAGEMENT S DISCUSSION AND ANALYSIS Global wealth management During the fiscal second quarter, market values of most global equities strengthened markedly. Canadian equity markets benefitted from higher commodity prices and positive economic momentum domestically and globally. As a result, the S&P 500, the S&P/TSX and the MSCI World index ended the quarter returning 4.5%, 3.7% and 5.3% respectively. Total Return (excl. currencies) Q217 Change (Q/Q) Q317 Change (Q/Q) Q417 Change (Q/Q) Q118 Change (Q/Q) Q218 Change (Q/Q) Fiscal Change (Y/Y) Fiscal 2018 Change S&P % 3.8% 6.1% 3.1% 4.5% 17.2% 7.7% S&P/TSX 5.5% 4.5% 2.4% -1.6% 3.7% 18.6% 2.0% MSCI EMERGING MARKETS 7.7% -1.4% 7.8% 6.7% 7.7% 15.5% 14.9% MSCI WORLD 5.4% 1.3% 7.0% 4.5% 5.3% 15.7% 10.0% S&P GS COMMODITY INDEX -4.2% 5.8% -5.1% -5.5% 7.2% 8.4% 1.4% US 10-YEAR T-BONDS -0.8% -6.0% 0.8% 0.9% 0.6% -3.0% 1.5% CAD/USD -1.6% -2.3% 0.9% 2.7% 4.0% -2.3% 6.8% CAD/EUR -2.7% 4.5% -0.4% -4.3% 0.6% 4.4% -3.7% Source: Thomson Reuters Datastream, Canaccord Genuity estimates Outlook We expect that global economic growth prospects will remain upbeat for the balance of fiscal Of the 35 countries we monitor, all show positive real GDP growth year over year in calendar Q2/17. Also, 27 countries (77%) exhibit accelerating growth and eight (23%) display positive but decelerating growth. From this we can conclude that the global economy is not only accelerating, but it is doing so in a synchronized fashion. With subdued inflation globally and EM central banks cutting rates, we believe global growth synchronization could extend for several more quarters in a context where global PMIs and leading indicators also provide an upbeat outlook. According to the MSCI World Index, earnings globally are expected to grow 10.8%. Against this backdrop, we expect capital expenditure growth to improve gradually, commodity prices to remain firm and resource sectors (energy and materials) and other globally-geared sectors to outperform in fiscal Despite elevated equity market valuations in Canada and in the US, we expect that the positive earnings backdrop should continue to support equity markets going forward. However, we expect a growth slowdown in Canada, given tighter financial conditions arising from two rate hikes by the Bank of Canada, higher bond yields and a stronger Canadian dollar. Additionally, should the outcome of NAFTA negotiations lead to increased trade protectionism, we expect that Canadian economic growth prospects would be markedly impaired. Elsewhere, we expect that the monetary policy normalization process in the US and eventually in Europe could cap valuation multiples and increase probabilities of a correction and/or increased volatility in equity markets over the next few months. That said, we believe that the odds of a bear market developing remain low given subdued recession risks. With regard to capital market activities, growing earnings and elevated valuation multiples prevailing in equity markets are generally supportive for M&A and new issue activities. Notably, low interest rates and strengthening commodity prices should create opportunities for resource companies to resume capital expenditures and/or acquire inexpensive assets, which a pick-up in financing activities. Regarding agency trading, the decline in volatility negatively impacted trading volumes over the past year. Increased volatility from current levels would likely support trading volumes. Last, our global wealth management operations are likely to benefit from further positive returns in risk assets. ABOUT CANACCORD GENUITY GROUP INC. S OPERATIONS Canaccord Genuity Group Inc. s operations are divided into two business segments: Canaccord Genuity (investment banking and capital markets operations) and Canaccord Genuity Wealth Management. Together, these operations offer a wide range of complementary investment banking services, investment products and brokerage services to the Company s institutional, corporate and private clients. The Company s administrative segment is referred to as Corporate and Other. Canaccord Genuity Canaccord Genuity offers corporations and institutional investors around the world an integrated platform for equity research, sales and trading, and investment banking services that is built on extensive operations in Canada, the UK, France, Ireland, the US, China, Hong Kong, Australia and Dubai. Canaccord Genuity Wealth Management Canaccord Genuity Wealth Management operations provide comprehensive wealth management solutions and brokerage services to individual investors, private clients, charities and intermediaries through a full suite of services tailored to the needs of clients in each of its markets. The Company s wealth management division now has Investment Advisors (IAs) and professionals in Canada, Australia, the UK, Guernsey, Jersey and the Isle of Man. 10 CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL 2018

11 MANAGEMENT S DISCUSSION AND ANALYSIS Corporate and Other Canaccord Genuity Group s administrative segment, described as Corporate and Other, includes revenues and expenses associated with providing correspondent brokerage services, bank and other interest, foreign exchange gains and losses, and activities not specifically allocable to either the Canaccord Genuity or Canaccord Genuity Wealth Management divisions. Also included in this segment are the Company s operations and support services in Canada, which are responsible for front- and back-office information technology systems, compliance and risk management, operations, legal, finance, and all administrative functions of Canaccord Genuity Group Inc. Corporate structure Canaccord Genuity Group Inc. US sub-group UK and Europe Wealth Management sub-group UK and Europe Capital Markets sub-group 50% Canaccord Genuity Corp. (Canada) Canaccord Genuity Wealth Management (USA) Inc. Canaccord Genuity Inc. (US) Canaccord Genuity Wealth (International) Limited (Channel Islands) Canaccord Genuity Wealth Limited (UK) Hargreave Hale Limited (UK) Canaccord Genuity (Dubai) Ltd. Canaccord Genuity Limited (UK) Canaccord Genuity Asia (China and Hong Kong) Canaccord Genuity (Australia) Limited The chart shows principal operating companies of the Canaccord Genuity Group as of. The Company owns 50% of the issued shares of Canaccord Financial Group (Australia) Pty Ltd and Canaccord Genuity (Australia) Limited, but for accounting purposes, as of the Company is considered to have a 58% interest because of the shares held in a trust controlled by Canaccord Financial Group (Australia) Pty Ltd [March 31, 58%]. CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL

12 MANAGEMENT S DISCUSSION AND ANALYSIS Consolidated Operating Results SECOND QUARTER AND FIRST HALF OF FISCAL 2018 SUMMARY DATA (1)(2)(3) Three months ended September 30 QTD Six months ended September 30 (C$ thousands, except per share and % amounts, and number of employees) Q2/18 vs. Q2/ YTD FY 2018 vs. FY Canaccord Genuity Group Inc. (CGGI) Revenue Commissions and fees $ 96,125 $ 95,342 $ 89, % $ 201,080 $ 188,214 $ 183, % Investment banking 33,356 40,901 31,147 (18.4)% 74,052 78,026 96,211 (5.1)% Advisory fees 30,589 21,554 44, % 49,485 61,148 66,269 (19.1)% Principal trading 22,849 26,859 17,592 (14.9)% 48,736 54,405 40,158 (10.4)% Interest 5,793 4,005 4, % 10,969 7,613 9, % Other 2,835 4,941 4,092 (42.6)% 7,033 10,376 9,122 (32.2)% Total revenue 191, , ,602 (1.1)% 391, , ,056 (2.1)% Expenses Incentive compensation 101, ,080 92,681 (2.7)% 207, , ,181 (1.9)% Salaries and benefits 21,664 20,633 22, % 44,071 42,542 45, % Other overhead expenses (4) 64,851 68,132 73,912 (4.8)% 135, , , % Acquisition-related costs 4,364 n.m. 6,548 n.m. Restructuring costs (5) 6,256 n.m. 6,704 n.m. Share of loss from associate 208 n.m. 208 n.m. Total expenses 198, , , % 400, , , % (Loss) income before income taxes (7,066) 757 1,499 n.m. (8,838) 10,768 13,946 (182.1)% Net (loss) income $ (7,258) $ 200 $ (431) n.m. $ (9,818) $ 7,655 $ 10,530 (228.3)% Net (loss) income attributable to: CGGI shareholders $ (7,485) $ (1,220) $ (105) n.m. $ (9,747) $ 5,462 $ 10,309 (278.5)% Non-controlling interests $ 227 $ 1,420 $ (326) (84.0)% $ (71) $ 2,193 $ 221 (103.2)% (Loss) earnings per common share diluted $ (0.11) $ (0.05) $ (0.03) (120.0)% $ (0.16) $ (0.01) $ 0.04 n.m. Return on common equity (ROE) (7.4)% (3.2)% (1.3)% (4.2) p.p. (5.5)% (0.2)% 1.0% (5.3) p.p. Dividends per common share $ 0.01 $ $ 0.05 n.m. $ 0.02 $ $ 0.10 n.m. Book value per diluted common share (6) $ 4.74 $ 4.70 $ % Total assets $3,413,398 $3,960,901 $3,981,552 (13.8)% Total liabilities $2,679,660 $3,223,981 $2,841,706 (16.9)% Non-controlling interests $ 13,354 $ 8,992 $ 11, % Total shareholders equity $ 720,384 $ 727,928 $1,128,485 (1.0)% Number of employees 1,953 1,727 1, % Excluding significant items (7) Total revenue $ 191,547 $ 193,602 $ 190,602 (1.1)% $ 391,355 $ 398,589 $ 405,056 (1.8)% Total expenses 186, , ,226 (2.4)% 383, , ,356 (0.4)% Income before income taxes 5,395 2,907 4, % 8,159 13,948 19,700 (41.5)% Net income 3,548 2,008 1, % 5,163 10,147 15,262 (49.1)% Net income (loss) attributable to: CGGI shareholders 3, ,187 n.m. 5,234 7,817 14,716 (33.0)% Non-controlling interests 227 1,490 (133) (84.8)% (71) 2, (103.0)% Net income (loss) attributable to common shareholders, adjusted 970 (2,481) (811) 139.1% 343 1,819 8,720 (81.1)% Earnings (loss) per common share diluted 0.01 (0.03) (0.01) 133.3% (100.0)% (1) Data is in accordance with IFRS except for ROE, book value per diluted common share, figures excluding significant items and number of employees. See Non-IFRS Measures on page 8. (2) The operating results of the Australian operations have been fully consolidated and a 42% non-controlling interest has been recognized for the three and six months ended [three and six months ended % and %.]. (3) Data includes the results of Hargreave Hale since the closing date of September 18,. (4) Consists of trading costs, premises and equipment, communication and technology, interest, general and administrative, amortization of tangible and intangible assets, and development costs. (5) Restructuring costs for the six months ended related to termination benefits incurred as a result of the closing of certain trading operations in our UK and Europe capital markets operations, staff reductions in our Canadian and US capital markets operations, as well as real estate and other integration costs related to the acquisition of Hargreave Hale. (6) Book value per diluted common share is calculated as total common shareholders equity adjusted for assumed proceeds from exercise of options and warrants divided by the number of diluted common shares outstanding including estimated amounts in respect of share issuance commitments including options and warrants, as applicable, and adjusted for shares purchased under the normal course issuer bid and not yet cancelled, and estimated forfeitures in respect of unvested share awards under share-based payment plans. (7) Net income (loss) and earnings (loss) per common share excluding significant items reflect tax-effected adjustments related to such items. See the Selected Financial Information Excluding Significant Items table on the next page. n.m: not meaningful p.p. percentage points 12 CANACCORD GENUITY GROUP INC. SECOND QUARTER FISCAL 2018